1. Performance evaluation in most firms is applied at:
2. Risk aversion is by:
3. The process by which managers at all levels in the firm gain information about the
performance of tasks within the firm and judge that performance against pre-established criteria
is:
4. Operational control has a management-by-exception approach in contrast to
management control, which is more consistent with:
5. A strategic business unit (SBU) consists of a well-defined set of controllable operating
activities over/about which the SBU manager is:
6. The objectives of management control of the manager include:
7. The principal-agent economic model applied to employment contracts includes two of the
following management performance aspects:
8. The “risk-averse” manager will be improperly biased to:
9. In properly developing formal systems at the team level that will have the desired impact
on employees’ performance, the management accountant should recognize any existing informal
systems and:
10. The common factor among control systems in hiring practices, promotion policies, and
strategic performance measurement is:
11. Among the benefits of centralized management in a firm is(are):
12. The benefits of decentralized management in a firm include all of the following except:
13. The need for coordination between the production and the selling function will impact the
choice of:
14. By not distinguishing between direct and indirect costs in their performance reporting,
many companies:
15. As a strategic issue, “budget slack” could represent a:
16. “Outsourcing” a cost center is often done to:
17. Cost allocation of service department costs to production departments make the
evaluation and control processes in the production departments:
18. From a strategic standpoint, profit centers tend to:
19. The contribution by profit center (CPU) expands the contribution margin income
statement by distinguishing:
20. The main concept of the balanced scorecard is that, to evaluate the SBU’s progress to
strategic success, an organization must use all of the following except:
21. In a not-for-profit organization, you are more likely to see
22. The evaluation by upper-level managers of the performance of mid-level managers is:
23. The evaluation of operating level employees by mid-level managers is:
24. The manager acting independently in such a way as to simultaneously achieve top
management’s objectives is exhibiting:
25. A model that has been used to better understand the key elements that contracts must
have in order to achieve the desired objectives is:
26. Order-filling costs:
27. Controllable margin is determined by subtracting short-term controllable fixed costs from
the:
28. An employment contract is an agreement between the manager and top management
designed to provide incentives for the manager to act:
29. The least common type of SBU in a retail firm is the:
30. Which one of the following is a drawback of decentralization?
31. Production or support SBUs within the firm that have the goal of providing the best
quality product or service at the lowest cost are:
32. SBUs that generate revenues and incur the major portion of the cost for producing those
revenues are:
33. SBUs that include the assets they employ as well as profits in the performance
evaluation are:
34. The replacing of controllable costs with non-controllable costs by a department is:
35. For production and support departments, a method of implementing cost centers that is
input-oriented is the:
36. For production and support departments, a method of implementing cost centers that is
output-oriented is the:
37. Expenditures made in revenue centers usually include:
38. The balanced scorecard measures the SBU’s performance in all of the following areas
except:
39. Bradbo owned two adjoining restaurants, the Pork Palace and the Chicken Hut. Each
restaurant was treated as a profit center for performance evaluation purposes. Although the
restaurants had separate kitchens, they shared a central baking facility. The principal costs of the
baking area included materials, supplies, labor, and depreciation and maintenance on the
equipment.
Bradbo allocated the monthly costs of the baking facility to the two restaurants based on the
number of tables served in each restaurant during the month using dual allocation and equal
sharing of fixed costs. In April, the costs were $30,000, of which $16,000 were fixed. The Pork
Palace served 4,400 tables, while the Chicken Hut served 3,600 tables.
The amount of joint cost that should have been allocated to the Pork Palace in April is calculated
to be: